[Congressional Record Volume 165, Number 149 (Tuesday, September 17, 2019)]
[Extensions of Remarks]
[Pages E1164-E1165]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           U.S. TREASURY SETTLES WITH DR. VALENTIN GAPONTSEV

                                 ______
                                 

                         HON. JAMES P. McGOVERN

                            of massachusetts

                    in the house of representatives

                      Tuesday, September 17, 2019

  Mr. McGOVERN. Madam Speaker, I rise today to highlight the settlement 
concluded between the Department of Treasury and my constituent, Dr. 
Valentin Gapontsev, acknowledging that Dr. Gapontsev is not a Russian 
oligarch for purposes of the CAATSA listing that appears on Treasury's 
website. Dr. Gapontsev is the founder and CEO of IPG Photonics, 
headquartered in Oxford, Massachusetts, a global leader in fiber laser 
technology. I have followed his dispute with Treasury for over 18 
months, and I am glad to see it resolved favorably on behalf of my 
constituent.
  Therefore, I include in the Record the following: September 11, 2019 
Letter from Department of the Treasury to Dr. Gapontsev; September 11, 
2019 Press Release by IPG Photonics; and September 11, 2019 Washington 
Post article, ``Treasury admits Russian-born physicist shouldn't be on 
oligarch list that it cribbed from Forbes.''

                                   Department of the Treasury,

                               Washington, DC, September 11, 2019.
     Dr. Valentin P. Gapontsev,
     c/o IPG Photonics Corporation,
     Oxford, MA.
     IPG Photonics Corporation,
     Oxford, MA.
       Dear Dr. Gapontsev and IPG Photonics Corporation: The 
     following concerns the Secretary of the Treasury's 
     unclassified report to Congress on January 29, 2018, pursuant 
     to Section 241 of the Countering America's Adversaries 
     Through Sanctions Act (``CAATSA''), Pub. L. No. 115-44, 131 
     Stat. 886 (2017) (``the Section 241 Report''). The United 
     States Department of the Treasury is of the opinion that, if 
     it had to create the unclassified report today, Dr. Valentin 
     Gapontsev would not be listed among oligarchs in the Russian 
     Federation referred to in Section 241 of CAATSA. 
     Consequently, Dr. Gapontsev is not an oligarch in the Russian 
     Federation for purposes of Section 241 of CAATSA. The 
     Department's view is based on information we did not have at 
     the time the report was submitted to Congress. Among other 
     things, Dr. Valentin Gapontsev is a U.S. citizen and chairman 
     and CEO of IPG Photonics Corporation, a publicly-traded 
     corporation headquartered in the United States.
       Any reference to Dr. Valentin Gapontsev in the unclassified 
     Section 241 Report does not reflect any judgment of the 
     Treasury Department regarding compliance with U.S. law, 
     including those relating to sanctions against Russia or its 
     oligarchs.
           Sincerely,
     Paul Ahern,
       Acting Principal Deputy Assistant Secretary, Office of 
     Terrorist Financing and Financial Crimes.
                                  ____


                [From IPG Photonics, September 11, 2019]

  US Treasury Acknowledges That Valentin Gapontsev is Not an Oligarch


 Dr Valentin Gapontsev and IPG settle litigation with US Treasury over 
                          Congressional Report

       Oxford, MA.--IPG Photonics Corporation (NASDAQ: IPGP) today 
     announced that the U.S. Treasury publicly acknowledged Dr. 
     Valentin P. Gapontsev is not an oligarch in the Russian 
     Federation for purposes of Section 241 of Countering 
     America's Adversaries Through Sanctions Act (CAATSA). 
     Litigation over his inclusion in the so-called oligarch 
     report was resolved in consideration for the Treasury 
     Department's official and public finding that Dr. Gapontsev 
     is not an oligarch in the Russian Federation, and he would 
     not be included in the report to Congress if it were compiled 
     today.
       Dr. Valentin P. Gapontsev, founder and CEO of IPG 
     Photonics, a U.S.-based global leader in fiber laser 
     technology, sued the U.S. Treasury in December 2018 over its 
     report to Congress listing him as an oligarch of the Russian 
     Federation under CAATSA. Dr. Gapontsev asserted that the U.S. 
     Treasury had no basis in law or fact for including him in the 
     report.
       The letter, signed by Paul Ahern, Acting Principal Deputy 
     Assistant Secretary of the U.S. Treasury, says ``Treasury is 
     of the opinion that, if it had to create the unclassified 
     report today, Dr. Valentin Gapontsev would not be listed 
     among oligarchs in the Russian Federation referred to in 
     Section 241 of CAATSA based upon information it did not have 
     when the report was submitted to Congress.'' The letter also 
     states ``[a]ny reference to Dr. Valentin Gapontsev in the 
     unclassified 2018 report does not reflect any judgment of the 
     Treasury Department regarding compliance with U.S. law.'' The 
     Treasury published the letter on its website at https://
home.treasury.gov/system/files/136/Letter-09-11-2019.pdf.
       ``Ever since the Treasury Department issued the 2018 CAATSA 
     report to Congress, we have asserted that it was wrong in 
     declaring Dr. Gapontsev to be a Russian oligarch. We are 
     pleased that the Treasury has finally admitted this much in 
     its letter,'' said Angelo Lopresti, IPG Photonics' General 
     Counsel. He continued, ``During a court hearing, the U.S. 
     Government conceded that the U.S. Treasury based its 
     unclassified CAATSA oligarch report entirely on a list taken 
     from a 2017 Forbes Magazine article. Dr. Gapontsev, a U.S. 
     citizen, is a world-renowned scientist and entrepreneur who 
     created thousands of U.S. jobs as he commercialized fiber 
     laser technology.''
       On January 29, 2018, the U.S. Treasury Secretary designated 
     96 individuals as ``oligarchs in the Russian Federation'' 
     pursuant to Section 241 of the CAATSA, including Dr. Valentin 
     Gapontsev. IPG Photonics, headquartered in Massachusetts, is 
     the world leader in fiber laser technology, with more than 
     4,000 customers, 25 facilities and 6,000 employees worldwide.
       Dr. Gapontsev asserted in the litigation that his wealth 
     stems entirely from successfully growing IPG Photonics and 
     his fiber laser innovations over the last three decades, not 
     from any connections with the Russian government.


                    About IPG Photonics Corporation

       IPG Photonics Corporation is the leader in high-power fiber 
     lasers and amplifiers used primarily in materials processing 
     and other diverse applications. The company's mission is to 
     make its fiber laser technology the tool of choice in mass 
     production. IPG accomplishes this mission by delivering 
     superior performance, reliability and usability at a lower 
     total cost of ownership compared with other types of lasers 
     and non-laser tools, allowing end users to increase 
     productivity and decrease costs. A member of the S&P 500 
     Index, IPG is headquartered in Oxford, Massachusetts and has 
     more than 25 facilities worldwide. For more information, 
     visit www.ipgphotonics.com.
 ____


               [From the Washington Post, Sept. 11, 2019]

 Treasury Admits Russian-Born Physicist Shouldn't Be on Oligarch List 
                      That It Cribbed From Forbes

                           (By Steven Mufson)

       The U.S. Treasury Department issued a letter Wednesday 
     stating that Valentin P. Gapontsev, an 80-year-old laser 
     physicist who became a U.S. citizen a decade ago, does not 
     belong on a list of Russian oligarchs that Treasury admitted 
     in court to having cribbed entirely from a 2017 Forbes 
     Magazine article.
       Gapontsev, who has built a $6.8 billion company called IPG 
     Photonics based in Oxford, Mass., was No. 27 on the list of 
     96 Russians that Treasury gave Congress when lawmakers were 
     eager to retaliate for Russian interference in U.S. 
     elections.
       In the letter Treasury issued Wednesday, it said it was 
     revising its view ``based on information we did not have at 
     the time the report was submitted to Congress.''
       Gapontsev has said that he never belonged on the list and 
     that he had feared that Congress might use the list as a tool 
     for applying pressure on the Kremlin. He said that unlike the 
     Russian oligarchs, he built his company over three decades 
     based on its advanced laser technology, not Kremlin 
     connections.
       Under sanctions law, targets could be banned from entering 
     the United States, and their assets could be frozen. Some 
     lawmakers in 2018 quickly launched a letter-writing 
     initiative aimed at getting financial institutions to 
     identify the assets of people on the list as a way to make 
     banks skittish about doing business with them.
       Treasury wouldn't budge on the listing, however, and 
     Gapontsev filed suit in federal court Dec. 3, 2018.
       The Treasury said in a settlement Wednesday that Gapontsev 
     did not belong on the list under Section 241 of the 
     Countering America's Adversaries Through Sanctions Act. It 
     said that it was ``of the opinion that, if it

[[Page E1165]]

     had to create the unclassified report today, Dr. Valentin 
     Gapontsev would not be listed among oligarchs in the Russian 
     Federation.''
       The CAATSA legislation was passed by overwhelming margins 
     in Congress on Aug. 2, 2017, in a rare show of 
     bipartisanship. The measure demanded both classified and 
     unclassified lists of ``the most significant senior foreign 
     political figures and oligarchs in the Russian Federation, as 
     determined by their closeness to the Russian regime and their 
     net worth.''
       ``Ever since the Treasury Department issued the 2018 CAATSA 
     report to Congress, we have asserted that it was wrong in 
     declaring Dr. Gapontsev to be a Russian oligarch. We are 
     pleased that the Treasury has finally admitted this much in 
     its letter,'' Angelo Lopresti, IPG Photonics' general 
     counsel, said in a statement.
       Gapontsev earned his doctorate and worked at the Moscow 
     Institute of Physics and Technology. In 1990, at age 51, he 
     started IPG Photonics, which produces high-power fiber-optic 
     lasers for telecommunications and cutting materials. He also 
     opened facilities in Burbach, Germany.
       But he soon moved the firm to the United States, then his 
     biggest market. BellSouth was one of his main customers. He 
     raised $100 million of private-equity investments from U.S. 
     firms.
       ``During a court hearing, the U.S. Government conceded that 
     the U.S. Treasury based its unclassified CAATSA oligarch 
     report entirely on a list taken from a 2017 Forbes Magazine 
     article,'' Lopresti added.
       He said that Gapontsev ``is a world-renowned scientist and 
     entrepreneur who created thousands of U.S. jobs as he 
     commercialized fiber laser technology.''